In an effort to placate a growing backlash from Xstrata shareholders over Friday’s aggressive reworking of the proposed “merger of equals”, Glencore chief executive Ivan Glasenberg has also offered compromises over the role of Mick Davis, his opposite number at Xstrata, and over the structure of the proposed deal. Mr Glasenberg is now prepared to see Mr Davis remain as chief executive of the combined group for six months before passing him the reins – and potentially allow him to exit with a bigger pay-off than the 8m pounds he would take under his existing contract. He would also be entitled to shares, currently worth about 28m pounds, awarded under various incentive schemes. In a further concession, Glencore is now proposing to keep the deal’s original legal structure, requiring approval from 75 per cent of shareholders, with the commodity trader unable to vote its own 34 per cent stake, The Telegraph says.
Hundreds of thousands of small firms are to be freed from health and safety inspections as part of renewed attempts by the coalition to prove that it has the ideas to revive the economy. The change, coupled with moves to make it easier for companies to hire and fire workers, will heighten the tension between Government and trade unions. Fresh industrial unrest is already expected later this year. An anti-austerity rally is already planned for October 20. Unions will discuss the idea of a general strike this week at the TUC’s annual conference. Two of Britain’s biggest public sector unions, Unison and the GMB, have indicated that they will co-ordinate walkouts over local government and health service pay, The Times explains.
Greece’s foreign lenders have rejected parts of a €12bn (£9bn) austerity package prepared by the government, Greek officials said on Sunday as the two sides resumed talks after a month-long hiatus. Greek Finance Minister Yannis Stournaras played down the inspectors’ objections, saying they had rejected only a “few” measures. A senior Greek government official had said earlier that the troika had sought more details on the proposals to understand them better. Officials declined to specify what the objections related to but a source familiar with the matter said they were over measures to save roughly €2bn by cutting expenses in the public sector.
German political leaders have defended the European Central Bank’s decision to step up its bond-buying plan for Eurozone stragglers, despite a ferocious reaction at home. Angela Merkel showed how far she had moved from her former hard-line position on Saturday by praising the ECB for “playing its role with its particular responsibilities” after the announcement on Thursday, which continued to cheer markets the next day. Wolfgang Schäuble, the Finance Minister, added that attacks on the central bank and its Italian President Mario Draghi made for good headlines but were groundless. “It is not the beginning of monetary financing of sovereign debt,” Mr Schäuble said, dismissing the German media as “very nervous,” The Times reports.
Up to 16,500 extra buyers will be helped into a first home after a £280m boost for shared ownership schemes. The Government is pumping more cash into its FirstBuy scheme as part of last week’s bid to boost the housing market. FirstBuy allows qualifying buyers to buy a new-build property with a mortgage of just 75% of its value. The buyer puts up a deposit of at least five per cent, and the State and the builder together provide an ‘equity loan’, effectively holding on to a stake in the home worth up to 20%. When the property is sold, the builder and the State are repaid a percentage of the sale value to reflect their joint ownership. For example, a buyer who takes an 80% share in a £120,000 home and then sells for £140,000 five years later would keep £112,000 of the proceeds. The equity loans are free for the first five years, then cost 1.75% a year after that, The Daily Mail explains.
George Osborne will be told today to set up an Office for Growth, similar to the Office for Budget Responsibility, to oversee his pledges to kick-start the economy this autumn. In a hard-hitting demand for the coalition that took office two years ago to formalise an industrial policy, the EEF manufacturers’ body damns political leadership on the issue of economic growth as inconsistent, incoherent and unaccountable. The publication of a raft of proposals from the EEF comes ahead of plans this week for Vince Cable to pledge a more co-ordinated support programme for manufacturing industries and reheat commitments to cut red tape, The Times says.
Growth of the private sector economy in Scotland reached its slowest rate in 20 months in August as orders slumped and the price of raw materials rose, a report out today has revealed. The latest Bank of Scotland PMI report shows that Scottish private sector activity increased only marginally in August, at a rate well below the UK-wide average. The slump reflected a broad-based and accelerated drop in new work for both manufacturers and service businesses, which led to weaker job creation. Companies hit by the rising cost of fuel and raw material – increasing at the fastest rate since April – led to businesses being forced to raise prices over the month. In August, the PMI fell for the second month running to 50.3, from 51.0 in July, and signalled only a marginal increase in services activity and a contraction in manufacturing. Five other UK regions saw reductions in new work, but only Northern Ireland posted a more marked drop than Scotland, according to The Scotsman.